MTN Ghana Affirms Commitment To Good Corporate Citizenship

FEBRUARY 02, 2015: MTN Ghana wishes to affirm its commitment to good corporate citizenship and a continued focus on making significant contributions to the development of Ghana.

MTN Ghana has observed with increasing concern apparent misconceptions relating to the perceived findings of an audit of the industry by the National Communications Authority (NCA).

In the interest of transparency and good citizenship MTN wishes to clarify the following:

1. MTN is a traded company with utmost regard for integrity and good corporate governance.

2. MTN Ghana’s financial results are reported on a quarterly and annual basis and included in MTN Group results and are available for public scrutiny at

3. Pursuant to its obligations under the terms of its license and laws of Ghana, MTN submits operational and financial data on a monthly, quarterly and annual basis to the National Communications Authority and monthly and quarterly financial reporting to Ghana Revenue Authority.

4. In 2012, the NCA commissioned a revenue assurance audit of MTN’s financial regulatory obligations for the period of 2 ½ years spanning 01 January 2008 to 30 June 2011.

5. Following the submission of the audit findings in 2013, MTN has since paid to the NCA:

a. GHs3,206,850 for liability in respect of regulatory fees, and

b. Ghs14,623,755.64 for penalty in respect of international incoming traffic

6. The GHs3.2 million payment in respect of regulatory fees was based on interpretation. In computing “net revenues” for calculation of 1% regulatory fees MTN deducted expenses including dealer commissions and incentives.The NCA disagreed with MTN’s computation, citing an amendment to the definition of “net revenues” in the Mobile License.Following extensive discussions with NCA, MTN has since paid the amount.

7. The GHs14.6 million payment in respect of international incoming traffic was due to statutory penalties relating to charging an amount lower than US$0.19 per minute in the West African Region. Following the institution of a surcharge on international incoming traffic in 2012, MTN did not increase the tariff for ECOWAS countries. This reduced the cost burden to consumers calling within the ECOWAS region, served to ease doing business within the region, enhanced the regional integration agenda and increased traffic. MTN did pay the US$0.06 per minute due to government of Ghana for the applicable traffic. However, MTN was found to be in contravention of the requirement to chargeUS$0.19 per minute for international incoming traffic. The penalty for the contravention was payment of 200% of the difference between US$0.19, and the lower rate charged. MTN has paid the GHs14.6 million penalty and increased the rate to US$0.19.

8. MTN completely and absolutely rejects any suggestion of financial malfeasance in its operations.

9. In fact, MTN is a leading tax payer in Ghana, with a conglomeration of taxes (includingVAT, CST, NHIL, NCA fees, GIFEC fees, frequency charges, national stabilization levy, income tax, etc.) that results in 34.5% of every 1 GHS spent by an MTN customerbeing paid as taxes.

10. In 2013 MTN’s total tax contribution was GHS 433,210,640.90.

11. In fact, in 2014 MTN was adjudged the Best Corporate Taxpayer (Domestic) for the year 2013 by the Ghana Revenue Authority. In a citation presented to MTN, the GRA stated, “You are one of those rare Ghanaian companies which craves for excellence in payment and filing of its tax obligation – a perfect taxpayer. Notwithstanding the fact that the year 2013 was a very challenging year to most businesses and tax payers in Ghana, you displayed good corporate citizenship by paying all the taxes by the due dates”.

12. MTN’s support for national development goes far beyondtax contributions to creation of approximately 500,000 direct and indirect employmentfor people within a comprehensivenetwork of suppliers and partners including distributors, dealers, canvassers and retailers advertising, events, public relations and media agencies, research companies, printing companies and content providers.

13. MTN’s support for national development is intrinsic to its core responsibility of providing innovative, data and voice services through which Ghanaians can reap the benefits of technology.

14. Through the MTN Ghana Foundation MTN continues to invest a percentage of profits after tax into sustainable Corporate Social Investment projects that have made healthcare and education accessible to thousands of Ghanaians, and economically empowered hundreds of deprived households.

MTN wishes to assure its stakeholders that the Company remains resolute and steadfast in its vision of leading the delivery of a bold new digital world to its customers. MTN is run byhuman beings who are skilled, dedicated and honest; like any human beings they can make mistakes. With integrity as a pillar of its core values, MTN will continue to practice good corporate governance while bringing innovation and quality services to its cherished customers.

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